Thermal coal

Production area The mine-mouth thermal coal prices were range-bound. Some miners presented subdued production enthusiasm approaching the end of the year as they were close to completing their targets. Encouraged by increased trucks arriving for loading, several miners in Yulin of Shaanxi marginally raised prices. However, the regional slippery conditions in some road sections under continued low temperature, on-demand purchases from end-users and thick wait-and-see stance among traders continued to curb the activities for long-haul trucking. Miners mainly focused on short-distance delivery of coal including to nearby railway stations. Some miners saw downside pressure on prices due to inventory pressure. The overall coal prices are likely to move sideways amid weak year-end supply and demand.

Northern port The portside sentiment weakened, with some offer prices dipping by about 5 yuan/t and settlement levels accordingly sliding compared with the preceding day. Views were divided among participants. Some saw the recent marginal price cuts did not necessarily point to a continued downtrend, with support of high coal consumption and existing restocking demand from power plants. However, some were inclined to accelerate sales for fear of possible deeper price declines as supply is projected to improve in January when demand may retreat due to slowed industrial activities ahead of the Spring Festival holiday.

Import market The imported coal market ran stable. The bidding prices to domestic utility tenders were relatively unchanged, while offer prices from foreign miners remained firm. Importers reported a continued lack of arbitrage amid high import cost and low counteroffer prices from buyers. Transactions were weak in the FOB market. Indonesian 3,800 Kcal/kg NAR coal was offered at $60-61/t and $58-59/t FOB respectively for Panamax and Supramax vessels.

Coking coal

Coking coal supply fluctuated at a comparatively low level. The overall trading enthusiasm remained subdued due to molten iron production cuts and the diminishing confidence in the fourth round of coke price hike. Middlemen mostly retreated to the sidelines. Coking plants mostly only made on-demand purchases due to high feed coal cost. Online coking coal auctions continued to conclude with mixed results, but both the price increase and decline narrowed compared with earlier this week. Most miners still reported smooth dispatches and did not face selling pressure. Miners maintained firm spot offer prices, anticipating supply is unlikely to recover to normal levels in the short term.

In the seaborne coal market, demand from Chinese end users mildly improved after the drop of Australian coal prices. A Chinese buyer bought Australian premium low-vol hard coking coal at $335/t CFR China, translating to about 2,750 yuan/t delivered to port with VAT. The demand from Chinese buyers is expected to continue to shore up the coal prices in the near term.

Met coke

The continued decline in blending coking coal prices improved profit margins at some coking plants and encouraged them to slightly raise prices. This, together with eased environmental checks, resulted in higher coke capacity utilization. Steelmakers presented lower demand for coke due to increased maintenance on blast furnaces and reduced molten iron output. Some mills have maintained replenishment due to insufficient arrival of coke as road transportation has yet to fully recover. The near-term coke market is expected to remain stable, as the overall supply turns loose as a whole and cost support weakens.